Acquisition

Finally Google got what it wanted! an approval from Department of Justice to acquire ITA Software, one of the two main travel engines behind the any travel site. Google acquired this at 700million on Jul 1 , 2010. Google has been waiting patiently for last 9 months for this approval. Since this is the main engine behind Expedia, Bing and many others like Traelocity, those companies were worried about Google either vioilating the terms of their contracts or compete against them so they (including Microsoft) tried to block the approval.

Google, however, maintained the line that it is not competing to ITA SOftware so there is no consolidation / monopoly and it would honor the existing terms so the customers should not be worried.

Here is the google positioning:

Though most of the customers like Expedia, Travelocity should not be having any immediate problems, Bing’s travel fuctionality would have an immediate competetion. However, Google finally won the approval. Let us see how it evolves the software, supports the existing customers and still fulfills its own business purpose.

According to the Google, “We indicated last July that we would honor ITA’s existing contracts. Today we’ve formally committed to let ITA’s customers extend their contracts into 2016. We’ve also agreed to let both current and new customers license ITA’s QPX software on “fair, reasonable and non-discriminatory terms” into 2016″

According to Department of Justice ‘s terms, it seems that Google would have to:

2. The department said that the proposed settlement will protect competition for airfare comparison and booking websites and ensure those websites using ITA’s software will be able to power their websites to compete against any airfare website Google may introduce.

3. Google will be required to continue to license ITA’s QPX software to airfare websites on commercially reasonable terms. QPX conducts searches for air travel fares, schedules and availability.

4. Google will also be required to continue to fund research and development of that product at least at similar levels to what ITA has invested in recent years.

5. Google will also be required to further develop and offer ITA’s next generation InstaSearch product (yet to come) to travel websites, which will provide near instantaneous results to certain types of flexible airfare search queries.

6. Google will be required to implement firewall restrictions within the company that prevent unauthorized use of competitively sensitive information and data gathered from ITA’s customers. The proposed settlement delineates when and for what purpose that data may be used by Google.

7. Google is also prohibited from entering into agreements with airlines that would inappropriately restrict the airlines’ right to share seat and booking class information with Google’s competitors.